Deep Dive into China's 2015 Internet Healthcare Policy Landscape and Strategic Product Positioning

Source: Internet Healthcare China Conference Policy Research Group / Chen Xin

2015 marked the final year of the 12th Five-Year Plan for health development and served as the foundational year for laying out the 13th Five-Year Plan. Although numerous top-level policy documents were issued in the healthcare sector in 2014—ranging from macro-level strategic directives, such as adjustments to fertility policies, reforms of grassroots public hospitals, encouragement of private capital in healthcare, and expansion of critical illness insurance, to specific operational guidelines on improving doctor-patient relationships, enabling multi-site practice for physicians, implementing tiered diagnosis and treatment, and regulating telemedicine—these measures indeed began to address the deep-seated contradictions within the healthcare system and mechanisms. However, the complexities in the healthcare sector cannot be resolved within a single year; profound institutional and mechanistic reforms will necessarily continue to be implemented under the 13th Five-Year Plan. Therefore, Chen Xin, a policy researcher at the Internet Healthcare China Conference, believes that 2015 will be a year characterized by mutual contention among various regulatory bodies and stakeholders with differing interests in the healthcare sector. Nevertheless, the direction toward deeper reform in healthcare will not reverse. In this context, strategically positioning oneself in the internet healthcare industry in 2015 and taking proactive steps will be of significant importance for enterprise development over the next five years.

2015 Macro Healthcare Policy Focused on Stability

The top-level design for the healthcare sector in 2015 will continue to follow the direction established in 2014, with minor adjustments in specific areas. First, fertility policies will be cautiously adjusted. More than a year after the implementation of the policy allowing couples to have a second child if one parent is an only child, pressures from localized baby booms have become evident. Achieving precise, localized control will be a key focus in the next phase. Second, critical illness insurance will further attract commercial capital. As pilot programs for critical illness insurance expand, fiscal burdens on local governments are gradually becoming apparent. 2015 will be a year of opportunity for deep involvement by commercial insurers. Third, exploration of privately run medical institutions will continue. Due to the persistent issues of small scale, fragmentation, and disorder in the private healthcare sector, 2015 will remain a period for institutional consideration and development, requiring careful deliberation and prudent action. Finally, reform of county-level public hospitals will be comprehensively advanced. In 2015, specific indicators for the comprehensive reform of county-level hospitals across China are becoming increasingly clear, creating a favorable environment for external participation.

Internet Healthcare Companies Must Deeply Integrate with Medical and Technological Resources to Survive

Starting in 2015, the internet healthcare industry will enter a period of consolidation. Statistics show that there are already more than 2,000 mobile healthcare apps, primarily covering appointment scheduling, triage and consultation, and information exchange, with services becoming increasingly homogeneous. On the other hand, in addition to commercial companies such as Alipay, Chunyu Doctor, and BAT (Baidu, Alibaba, and Tencent), some local governments as well as a number of public and private hospitals have recognized the substantial profits in this market segment and have begun to independently develop internet healthcare platforms or seek collaborations with industry leaders to expand their market presence. As public medical institutions tighten the allocation of public health resources, many small and medium-sized enterprises that lack effective, continuous, and stable integration with hospitals, as well as in-house talent pools and technological barriers, are highly likely to fall behind.

Internet Healthcare Enterprises Must Adopt a Long-Term Vision and Act Swiftly in Their Strategic Development

The long-term development of internet healthcare must take social impact into account. In the future, health and wellness demands will continue to center on three core areas: addressing population aging, preventing and controlling major chronic diseases, and meeting basic medical needs. In 2015, strategic investments can be considered in the following specific fields:

In terms of improving population quality.Consider the strategic layout for safe contraception and birth defect prevention. It is advisable to acquire a portfolio of novel contraceptive technologies and birth defect screening solutions for commercial promotion. Furthermore, consider establishing a reproductive health education platform targeted at men, creating a specialized drug database for pregnant women, and developing a database for pediatric triage and medication guidance, thereby contributing to population control and the reduction of birth defects.

In the prevention and control of chronic diseases.Consider deploying advanced medical technologies and collecting patient data. Specifically, in the prevention and treatment of cardiovascular diseases, collaborate with specialized research institutions to survey, organize, and develop patient-related data. In clinical diagnosis and treatment, strive to cooperate with national and local cardiovascular clinical diagnosis and treatment centers to introduce advanced diagnostic and therapeutic technologies, thereby establishing proprietary technological barriers. For the prevention and treatment of malignant tumors, in addition to focusing on early prevention and postoperative rehabilitation, consider appropriately introducing specific offline services such as Traditional Chinese Medicine (TCM) conditioning and end-of-life care. Furthermore, for high-priority conditions receiving significant national attention—including metabolic diseases, respiratory diseases, chronic kidney disease, and blood purification—advance planning should be undertaken for their prevention, diagnosis, treatment, and rehabilitation, ensuring effective resource integration and offline deployment.

In the prevention and control of common diseases and epidemics.In addition to focusing on the layout for common and frequently occurring conditions such as gastroenterology, prevalent diseases among women and children, fractures, and occupational diseases, alternative approaches can be adopted to address severe infectious diseases like Influenza A. This involves collaborating with local Centers for Disease Control and Prevention (CDCs) and vaccine manufacturers to engage in epidemic control, preventive healthcare, and disease surveillance. For common diseases, assistance can be provided in establishing informatization standards, overall construction plans, IT support platform solutions, and accompanying standards for township health centers and community clinics. Joint efforts can also be made in drug procurement, distribution, and home-use guidance to help enhance the standardization of primary healthcare services. Regarding infectious diseases, priority should be given to partnering with disease surveillance agencies and research institutions to accelerate the industrialization of scientific achievements in rapid detection technologies, pharmaceuticals, vaccine development, and protective measures. Furthermore, specific conditions currently receiving less attention, such as oral, ocular, and auditory lesions, should also be prioritized.

In the promotion of new technologies and equipment.Strategic planning should align with the overarching trend of bolstering independent innovation capabilities in China’s medical device sector and advancing the localization of medical devices. Major products in this field are continuously achieving breakthroughs, with significant progress made in key technologies and products for digital medical equipment. A range of innovative digital, intelligent, and portable medical devices has been deployed in primary healthcare institutions. Leveraging these existing scientific achievements to secure government support and facilitate their industrialization and commercialization will constitute a key growth driver for the internet healthcare industry in the future.

In terms of the dissemination of medical and health knowledge.Enhancing the medical and health knowledge of primary care physicians and the general patient population serves as both a prerequisite and a driving force for the development of the internet healthcare industry. In this regard, the Chinese Medical Association and the Chinese Preventive Medicine Association have conducted public health education campaigns for many years, yet the outcomes have fallen short of expectations. It is therefore of great significance to fully leverage the government’s promotional role in science popularization, effectively mobilize and capitalize on the dissemination advantages of internet companies, achieve effective integration, aggregation, and sharing of data, and subsequently conduct robust big data analytics.

Another Perspective on the Development of the Internet Healthcare Industry

At the practical level, internet-based healthcare remains largely concentrated in the areas of health education, health consultation, and health management. Although community hospital-centered, household-unit-based health monitoring services have been rolled out in regions such as Shanghai, Zhejiang, and Guangdong, the target beneficiaries of internet-based healthcare extend beyond patients to include a broad range of hospitals and even local health administrative authorities.

Improve the hospital and physician evaluation system.Due to the specialized nature of medical services, a certain degree of underutilization of high-quality medical resources has occurred. In this regard, it is advisable to pursue in-depth collaborations with hospitals that have idle high-quality medical resources. A strategic entry point would be to conduct industry-wide assessments of specialty departments with competitive advantages and establish a platform for publishing hospital medical service information, thereby empowering patients with sufficient and accurate information to make informed choices when selecting hospitals. Building on these foundational services, a holistic approach should be adopted to comprehensively evaluate and publicly disclose hospitals’ governance structures, development strategies, resource allocation, and clinical service capabilities, thereby enhancing the industry’s recognition of our evaluations of hospitals and their departments.

Health Resource Efficiency Evaluation and Allocation System.Given the scarcity of healthcare resources, determining the prioritization for resource allocation is a critical component in the formulation of health policies by regulatory authorities and in the strategic direction-setting by hospitals at all levels. To this end, it is advisable to establish a data collection and analysis system encompassing healthcare expenditure, population health status, maternal and infant mortality rates, total hospital service volume and service quality, as well as the budget management capabilities of governments and hospitals and the level of healthcare resource planning. Such a system would assist regulatory bodies and hospitals in building robust data infrastructure, facilitate a negotiation and communication platform for stakeholders, and help clarify the preferences of various parties—including hospitals and pharmaceutical distributors—thereby enabling their active participation in regulation and coordination.

Introduction to the China Internet Healthcare Association:

The China Internet Healthcare Council is an industry platform specializing in internet healthcare and mobile health, co-founded by Su Zhiwu, President of the Communication University of China, as the chief initiator, together with 14 other leading figures from the industry. It is committed to bringing together core decision-makers from government agencies overseeing internet and healthcare sectors, mainstream hospitals, industry enterprises, investment institutions, as well as key stakeholders from the enterprise, government, research, media, and medical communities. Its aim is to build an authoritative industry service platform that fosters cross-sector integration and development in China’s internet healthcare space.With the vision of leading the innovative development of China’s mobile health sector, the China Internet Healthcare Council is mandated to explore industry development trends, integrate resources across the industrial chain, establish a high-level dialogue platform, allocate capital for investment and incubation, cultivate talent needed by the industry, and promote the brand image of the platform. By further aggregating industrial resources, facilitating efficient communication within the platform, enhancing the industry influence of leading figures, setting industry standards, supporting high-quality projects, and advancing the healthy and rapid development of China’s internet healthcare sector.